Bitcoin exchange-traded funds (ETFs) attracted $1.2 billion during the initial two trading days of 2026, coinciding with Bitcoin’s surge to $94,000—a notable 7% increase within just a few days. This sequence seemed straightforward: institutional capital poured in, driving prices upward.
However, this apparent link conceals a deeper and more intricate transformation occurring across options markets, blockchain transaction flows, and derivatives positioning. These factors indicate that the rally is supported by more than mere spot market demand.
Valuing Convexity
Jeffrey Park, Chief Investment Officer at ProCap BTC, highlighted that on January 1st the Bitcoin options call skew turned positive for the first time since October. He emphasized an indicator closely monitored by institutional investors beyond asset under management figures: the relative cost of securing upside protection compared to downside hedging.
The call skew represents the difference between implied volatility of out-of-the-money call options versus comparable put options—often measured as a 25-delta risk reversal.
A positive spread indicates traders are willing to pay more for exposure to price increases than for insurance against declines. This premium on convexity in one direction acts as an active market signal reflecting participants’ expectations about future price movements.
A positive call skew signals authentic demand for leveraged upside exposure—whether from institutions betting on breakouts, retail investors chasing momentum trends, or structured products requiring calls inventory.
This dynamic also triggers mechanical effects: when dealers sell these calls they hedge their positions by purchasing spot assets or futures contracts as prices rise. This creates a feedback loop that intensifies upward momentum.
The shift in Bitcoin’s option skew at January’s start not only mirrored sentiment but fundamentally altered derivative market dynamics so that delta-hedging flows reinforce bullish moves automatically.
Redistribution of Supply and Leverage Patterns
An alternative perspective was offered by Checkonchain on January 5th who described “significant supply redistribution happening beneath the surface.”
The concentration of supply among top holders decreased sharply from 67% down to 47%, while realized profit-taking dwindled from over thirty thousand BTC in late November to fewer than four thousand BTC by early January.
This suggests that rather than merely climbing higher due to speculative fervor alone, the market was undergoing rebalancing—with large holders distributing coins into hands prepared to hold long-term rather than immediately cashing out profits.
The disappearance of profit-taking alongside rising prices implies new participants are accumulating with extended investment horizons instead of quick flips based on short-term gains.
This reduction in realized profits removes typical selling pressure which often limits rallies; recent buyers entered near current levels and thus have less incentive to exit upon modest appreciation gains.
The futures segment added complexity too: CoinGlass data revealed $530 million worth of liquidations within one day—including $361 million triggered from short positions—classic evidence of a short squeeze fueling recent advances;
Yet this squeeze unfolded amid relatively low leverage conditions overall. According to Checkonchain metrics between December 31st and January 5th crypto-native leverage declined slightly from 5.2% down to 4.8%, global leverage fell from roughly seven percent down toward six point six percent; futures-specific leverage nudged up marginally but remained well below historical highs at around three point three percent.
In such low-leverage environments , forced unwinding among shorts removes resistance without triggering systemic instability among longs .
The absence excessive borrowed capital means this rally isn’t vulnerable like highly leveraged moves which require rapid deleveraging once momentum fades . Spot-driven rallies carry lower reflexive risks associated with margin liquidations .
Structural Synergies Behind The Rally
The combined effect arising from recalibrated call skew pricing upside risk , ongoing consolidation shifting supply into stronger hands , plus sustained low leverage forms an environment where catalysts such as ETF inflows amplify existing trends instead initiating them .
ETFs served primarily as narrative anchors providing liquidity entry points ; however foundational structural elements enabling sustained price strength were already established beforehand .
Bitcoin surpassing $94 ,000 symbolized convergence across multiple underlying indicators pointing toward greater conviction underpinning this move beyond simple spot buying activity alone .